My father doesn't trust banks. All his money is in a checking account and a lockbox under the bed. Is playing it safe quietly costing him a fortune?

He has spent decades building up his nest egg, yet refuses to invest any of it. Instead, he keeps most of his money in a checking account and the rest in cash in a lockbox under his bed. He doesn’t trust financial institutions or the stock market, and he’s convinced investing could leave him with nothing.

But Lauren worries the opposite is happening. She’s heard that money sitting in cash gradually loses purchasing power over time; however, she doesn’t feel confident enough to explain why. She’s not sure whether it’s her place to try to change her father’s mind at all.

It’s a situation many adult children eventually face. They want to help aging parents make sound financial decisions, but without overstepping or dismissing concerns that may have been shaped by decades of life experience.

Why playing it safe with money can come with a cost

Lauren’s concern is valid, because money sitting in a checking account can slowly lose buying power. The balance may look exactly the same year after year, but if those dollars aren’t earning much interest, they may not stretch as far as they once did.

For example, if inflation averages 3% a year, $100,000 sitting in cash would have the purchasing power of roughly $74,000 after 10 years if no interest accrues. The account balance would still show $100,000 — but that money would buy less.

Still, it’s easy to understand why her father feels the way he does. At 75, after spending decades saving, he may see investing as a risk he doesn’t need to take. Watching an account balance rise and fall with the market can be uncomfortable, especially when that money represents years of hard work.

There’s nothing wrong with keeping some cash on hand. Many retirees like having money they can quickly access for bills, home repairs, medical costs, or other unexpected expenses. The bigger question is whether every dollar needs to stay there.

For Lauren’s father, the answer probably isn’t putting all of his savings into stocks. There are options that sit somewhere between a checking account and the stock market, including high-interest savings accounts, GICs, CDs, Treasury bills, and other lower-risk investments.

These may allow his money to earn something while still giving him a level of security.

The cash hidden in a lock box is an entirely separate issue. Unlike money held at a financial institution, cash kept at home can be stolen or destroyed, and there may be no way to recover it.

It can also create problems later if someone needs to help manage his finances or settle his estate. If he keeps cash at home, he should make sure someone he trusts knows it exists and where important records are kept. A hidden stash that only one person knows about can become a headache for family members down the road.

Lauren may also be looking at her father’s decision the wrong way. He says he doesn’t trust banks, but he already keeps the majority of his money in one. What he may actually be worried about is losing money in investments.

That’s an important distinction. A conversation about moving some money into a higher-interest account or exploring conservative options may go much better than telling him he needs to start investing.

The first question Lauren may want to ask is what exactly is he afraid will happen? Is he worried about a market crash? Losing access to his money? Not understanding how investments work? Once she knows what’s behind his hesitation, she may have a better chance of helping him find an approach he’s comfortable with.

Safer options than stuffing cash under the mattress

If Lauren brings this up with her father, the conversation probably shouldn’t start with investments.

Telling someone who has spent decades avoiding the stock market that they need to invest more is unlikely to change their mind. A better place to start may be understanding what is making him uncomfortable in the first place.

Maybe he watched his savings drop during a past market downturn. Maybe he’s worried about scams. Or maybe he simply likes knowing that his money is sitting somewhere he can access whenever he wants.

Once Lauren understands what’s behind her father’s concerns, the conversation may become less about convincing him to invest and more about finding an approach he’s comfortable with. He may be more open to moving a portion of his savings into a place where it can earn something while still feeling safe and accessible.